Whilst a big dividend yield is undoubtedly great, I think dividends that have significant growth potential are even better.
Two shares which I believe could provide exactly this are listed below. Here's why I think they are great option for income investors with a long time horizon:
Altium Limited (ASX: ALU)
Although Altium's shares only provide an unfranked 2.2% dividend, I wouldn't be too quick to dismiss it as a potential dividend star of the future. The printed circuit board (PCB) design software provider is certainly a company with enormous potential. Due to strong demand for its software, thanks to the rise of smart devices and the Internet of Things, management is confident it will double its revenue by FY 2020 to US$200 million. As well as this sales growth, I expect the company's margins to continue to expand as it scales. This should result in increased profitability and allow the company to grow its dividend at a rapid pace.
Mantra Group Ltd (ASX: MTR)
With the tourism boom showing little sign of slowing, I believe accommodation providers like Mantra are in a great position to profit. As demand for rooms increases, I expect to see Mantra enjoy higher occupancy levels and average room rates. Whilst there have been concerns over the impact Airbnb will have on its business, I believe the sheer number of visitors into Australia and the location of its properties puts it in a great position to continue its growth unabated. At present Mantra's shares provide a trailing fully franked 3.4% dividend.
